Income Policy #1: School Choice

School choice would help those who most need education, low income racial minorities.

Original Proposal: The Myth of American Inequality: How Government Biases Policy Debate

-Phil Gramm, Robert Ekelund, John Early

Proposal: Allow parents the option to allocate the per student investment towards the charter or public school of their choice.

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A phone made by the government would cost a fortune, weigh a ton, arrive late, then

once it finally arrives, won't work. This expression stuck for a reason. Governments are bad at innovation. Reason being that the public sector doesn't operate under the same incentives as markets and therefore is worse at creating anything anyone would want to buy. With broad support of this notion, it's a wonder we still allow our government to produce arguably our most important product, our education.

Universal public education once served a purpose. In a country of immigrants it helped turn a melting pot into a country by providing shared values and language. However, two hundred years later, we're left only with the drawbacks of a monopoly, high prices and low quality. The correlation between spending and student outcomes of the past 40 years, for all 50 states is just 0.075.

Think of this from the standpoint of an employer. If you keep giving your employees more money and they don't improve their performance, would you continue paying them more? Most likely not. However, the allure of "investing in our youth" is so attractive we don't realize funneling money into a monopoly doesn't help our kids.

We can't put all the blame on schools. IQ, drive, family, and zip code are all determinants of student outcomes, some more so than school itself! This makes it difficult to properly evaluate public schools.

We can't know for a kid turns out the way she does because of public school when there's a cocktail of other determinants. Nor can we honestly compare public to private schools outcomes. Private schools typically require tuition which self-selects wealthy people. Instead of private schools being the reason Andrew got into Harvard it may be because of his parents' donations to their alma mater. These confounders make it difficult to isolate the impact of a public school education. Without removing these confounders it's difficult to justify pulling resources away from public schools if the problem is elsewhere.

Charters solve this problem.Charters represent the gold standard of causal inference. By determining enrollment via lotteries, charters naturally set a randomized control trial (RCTs). Using a lottery (random selection) removes any bias to the parent's wealth, the student's IQ, and their drive. This point is crucial and deserves some explanation. If you've ever seen how farmers test different fertilizers, you understand the causal nature of RCTs. Agricultural Trials are a practice farmers use where they divide small plots of land into squares. Each square receives a different fertilizer and in so doing ensures the results are due to the fertilizer and not the section of ground, rainfall or other factors. Repeated enough times over large enough samples, difference in crop yields are attributed to the fertilizer. Charters work the same way with the public or charter school being the fertilizer and the students the square plots. Ironically, sometimes all you need to be certain is randomness.

The results are muddled with one clear theme. A large and growing body of literature reveals that charters aren't always better than public schools, but when they are, it tends to be for the benefit of low-income racial minorities.The Knowledge is Power Program (KIPP) is an organization of 200 charter schools across the U.S. 96% of students are Black or Hispanic and 88% qualify for free school lunch. A 2017 study conducted by Mathematica Policy Research evaluated a KIPP program that provided pre-K access through a lottery system. The treatment group consisted of students admitted to the charter via lottery while the control group were unselected students who went to public school. Tests were conducted over a 5-year period.

Results were compelling. Admission into KIPP pre-K represented a move from the 66th percentile into the 80th for Letter-Word identification, and a move from the 47th percentile to the 60th in math.Charters run by Success Academy in NYC is comprised of a similar socio-economic makeup as KIPP. Their students scored in the top 1% in the state for math scores and top 3% for English. Among Black students, 94% passed the math exam and 96% of Hispanic students passed. Citywide, only 56% of white students passed. Success Academy is a "no excuses" charter school which typically have stricter governing rules and post better outcomes for lower socio-economic kids.As more time passes, studies are now examining the long-term effects of charter schools on early professional life. In Florida, students in charter high schools proved more likely to go to college and earned 12% more in early adulthood.

The second part of this proposal is about localizing decision making to the family-unit by advocating they elect which school gets their kid's share of the state's public education budget. If public schools want tax dollars, let me prove their worth.This policy proposal addresses inequality in a way unfamiliar to most governments, by stepping back.

Most policies aimed at reducing inequality take the form of more government actions, either by increasing welfare or other handouts through increased taxes. However, school choice puts current tax dollars to better use. Providing more choice will force public schools to improve while simultaneously allowing kids an escape from outdated curricula and into more flexible programs that will prepare them for a changing economy. No amount of welfare or handouts can create a fair chance at life the way a good education can.

Despite 47 states having a charter form, only 7% of primary-school aged students are in charters. The map below displays the logged value of students per state in charter schools.

More than institutions, it's the presence of competition that defines a heathy democracy. We recognize this in every other facet of life. In sports, business, and personal life, competition makes us better. School choice was included in The Myth of American Inequality as a policy to tackle income inequality because we finally have the data to support a premise already known to be true. Sacrificing human potential in the form of early childhood education for public sector jobs simply isn't an acceptable trade-off. The societal loss is too great.